EHRM, 29-01-2013, nr. 66610/09

The Government stressed that the main aim of Legislative Decree no. 1195/1942 was to serve the general interest by preventing banks, limited companies and other legal entities from collecting the capital or income from securities when the holders of the securities had remained inactive; this was due in most cases to their having died without descendants or having decided to renounce their claims.

The applicant's claims had become time-barred under the general provisions of the Civil Code, which existed in parallel with those of the legislative decree and independently of them. The legislative decree differed from Articles 247 et seq. of the Civil Code in that sums in respect of which claims had become time-barred went to the State and not to the bank where the dormant account was held. The application of the provisions of the legislative decree in the applicant's case had had no particular impact on the limitation period since, in the Government's view, his claim would in any event have been time-barred even on the basis of the Civil Code alone, the only difference being that the bank rather than the State would have been the beneficiary.

In the Government's submission, the bank had not been obliged to notify the applicant when the limitation period was due to expire. As the bank had issued him with an account booklet, it had been up to him to ensure that it was kept up to date, since it constituted proof of the sum deposited in his account and the performance of transactions on the account (the Government referred to Court of Cassation judgments nos. 432/1990 and 1623/1995 — see paragraph 24 above).

Accordingly, the six-monthly update of the applicant's account statements by the bank, in the form of entry of the interest accruing on the account, did not stop the running of the limitation period, since that act was not addressed to the applicant and did not reach him but merely concerned the updating of the bank's data, which was an internal bank procedure. The act in question had not been notified to the applicant, as the latter had not come forward to perform a transaction or to have the changes to his account recorded in his booklet.

The Government further criticised the applicant for not having shown a minimum of diligence. Lastly, they pointed out that the domestic courts had rejected the grounds of force majeure advanced by the applicant in support of his argument that the limitation period had been suspended on account of his own and his wife's health problems.

The applicant submitted that his intention, at the time of opening the account and in the spirit of freedom of contract, had been to take out a life annuity policy. The application of a limitation period, when it was clear that there was no threat to public order, had been incompatible in his view with the principles of good faith, morality and reciprocal practices. Moreover, the capitalisation of the deposit by means of the accrual of interest could not, in his view, be time-barred in so far as the bank had thereby recognised his claim, in an indirect but nevertheless certain manner. Furthermore, the capitalisation of interest constituted grounds for suspension of the limitation period.

The applicant stressed that the bank should have informed him of the risk he ran of losing his money, and that the State should have kept the funds for a reasonable minimum time after expiry of the limitation period in order to protect his property and that of his heir. The applicant cited the examples of the French, Italian and German legislation, which provided for persons to be informed in this way.

In the applicant's view, the fact that there had been no transactions on his account during the limitation period had been due to force majeure, particularly between the last six months of the period and the date (6 February 2003) on which he had requested the bank to inform him of the status of his account.

Lastly, the applicant submitted that Legislative Decree no. 1195/1942 had never been ratified and did not have the force of a valid legal instrument. He considered it damning that a democratic country like Greece should apply legislation dating from the era of occupation by Nazi Germany and confiscate individuals' money without informing them. In his view, public-interest grounds could not be invoked to the detriment of the private interests at stake in the present case, in the absence of legislation allowing the persons concerned to receive compensation for the loss of their property.

The Court points out that Article 1 of Protocol No. 1, the essential object of which is to protect the individual against unjustified interference by the State with the peaceful enjoyment of his or her possessions, may also entail positive obligations requiring the State to take certain measures necessary to protect the right of property, particularly where there is a direct link between the measures an applicant may legitimately expect from the authorities and his effective enjoyment of his possessions (see Öneryıldız v. Turkey [GC], no. 48939/99, § 134, ECHR 2004-XII; Păduraru v. Romania, no. 63252/00, § 88, ECHR 2005-XII; Broniowski v. Poland [GC], no. 31443/96, § 143, ECHR 2004-V; and Sovtransavto Holding v. Ukraine, no. 48553/99, § 96, ECHR 2002-VII). Even in horizontal relations there may be public-interest considerations involved which may impose some obligations on the State. In Broniowski (cited above, § 143), for instance, the Court held that positive obligations under Article 1 of Protocol No. 1 might require the State to take the measures necessary to protect property rights (see Kotov v. Russia [GC], no. 54522/00, § 109, 3 April 2012).

The boundaries between the State's positive and negative obligations under Article 1 of Protocol No. 1 do not lend themselves to precise definition. The applicable principles are nonetheless similar. Whether the case is analysed in terms of a positive duty of the State or in terms of interference by a public authority which needs to be justified, the criteria to be applied do not differ in substance. Both an interference with the peaceful enjoyment of possessions and an abstention from action must strike a fair balance between the demands of the general interest of the community and the requirements of the protection of the individual's fundamental rights (see, among other authorities, Sporrong and Lönnroth v. Sweden, 23 September 1982, § 69, Series A no. 52, and Kotov, cited above, § 110).

The Court has also held that, in certain circumstances, Article 1 of Protocol No. 1 may impose ‘certain measures necessary to protect the right of property … even in cases involving litigation between individuals or companies’ (see Sovtransavto Holding, cited above, § 96). This principle has been applied extensively in the context of enforcement proceedings against private debtors (see Fuklev v. Ukraine, no. 71186/01, §§ 89–91, 7 June 2005, and Kesyan v. Russia, no. 36496/02, §§ 79–80, 19 October 2006; see also Kin-Stib and Majkić v. Serbia, no. 12312/05, § 84, 20 April 2010; Marčić and Others v. Serbia, no. 17556/05, § 56, 30 October 2007; and, mutatis mutandis, Matheus v. France, no. 62740/00, §§ 68 et seq., 31 March 2005).

In assessing compliance with Article 1 of Protocol No. 1, the Court must make an overall examination of the various interests in issue, bearing in mind that the Convention is intended to safeguard rights that are ‘practical and effective’. It must look behind appearances and investigate the realities of the situation complained of. That assessment may involve not only the relevant compensation terms — if the situation is akin to the taking of property — but also the conduct of the parties, including the means employed by the State and their implementation. In that context, it should be stressed that uncertainty — be it legislative, administrative or arising from practices applied by the authorities — is a factor to be taken into account in assessing the State's conduct. Indeed, where an issue in the general interest is at stake, it is incumbent on the public authorities to act in good time, in an appropriate and consistent manner (see Tunnel Report Limited v. France, no. 27940/07, § 39, 18 November 2010).

The Court further reiterates its case-law to the effect that the fact that an applicant's claims are subject to a limitation period does not by itself raise any issue with regard to the Convention. Limitation periods are a common feature of the domestic legal systems of the Contracting States, designed to ensure legal certainty and finality and prevent the injustice which might arise if courts were required to decide upon events which took place in the distant past (see J.A. Pye (Oxford) Ltd et J.A. Pye (Oxford) Land Ltd v. the United Kingdom [GC], no. 44302/02, § 68, ECHR 2007-III, and Stubbings and Others v. the United Kingdom, 22 October 1996, § 51, Reports of Judgments and Decisions 1996-IV).

Lastly, the Court stresses that the notion of ‘public interest’ in the second sentence of the first paragraph of Article 1 of Protocol No. 1 is necessarily extensive. The national authorities are in principle better placed than the international judge to appreciate what is in ‘the public interest’.

The Court, finding it natural that the margin of appreciation available to the legislature in implementing social and economic policies should be a wide one, will respect the legislature's judgment as to what is in the public interest unless that judgment is manifestly without foundation. The possible existence of alternative solutions does not in itself render the contested legislation unjustified. Provided that the legislature remains within the bounds of its margin of appreciation, it is not for the Court to say whether the legislation represented the best solution for dealing with the problem or whether the legislature's discretion should have been exercised in another way (see J.A. Pye (Oxford) Ltd v. the United Kingdom, n^o 44302/02, §§ 43–45, 15 November 2005).

In the present case the Court notes first of all that when the applicant went to his bank on 6 February 2003 to enquire about the status of his account, he learnt that, since there had been no transactions on the account since the second half of 1981, all claims in relation to it were time-barred. It is clear from the decisions of the domestic courts that, on opening the account, the applicant had entered into an agreement with the bank which, according to consistent case-law and legal theory in Greece, constituted an agreement on the deposit of fungible goods (Article 830 of the Civil Code).

The applicant's claims arising out of that agreement were subject to the twenty-year limitation period laid down by the Civil Code (Articles 247 and 249).

The Court also notes that the domestic courts to which the applicant took his case based their findings on Article 3 of Legislative Decree no. 1195/1942, under the terms of which cash deposits and the corresponding interest held with banks were transferred permanently to the State where they had not been claimed by the account holder or where there had been no transactions on the account for a period of twenty years. The Court of Appeal, moreover, held that the limitation period had neither stopped running — as the entry in the bank's records of the interest accruing on the applicant's account did not cause time to stop running (see paragraph 9 above) — nor had it been suspended by force majeure as argued by the applicant (see paragraph 10 above).

In the Court's view, the time-barring of the applicant's claims in respect of his own account constituted interference with his property rights. The interference in question was neither an expropriation nor a measure to control the use of property; it therefore falls to be dealt with under the first sentence of the first paragraph of Article 1 (see, mutatis mutandis, Optim and Industerre v. Belgium (dec.), no. 23819/06, § 35, 11 September 2012). It must therefore be determined whether a fair balance was struck between the demands of the general interest of the community and the requirements of the protection of the individual's fundamental rights.

The Court does not doubt that the limitation period imposed under Articles 247 and 249 of the Civil Code and Article 3 of Legislative Decree no. 1195/1942 pursued a legitimate aim. As the Court of Appeal stressed in its judgment of 6 April 2006, the twenty-year limitation period for agreements on the deposit of fungible goods was justified by an aim in the public interest, namely that of terminating, in the interests of the community, legal relationships that had been created so long before that their existence had become uncertain.

Regard being had, among other factors, to its case-law concerning statutory limitation (see paragraph 43 above), the Court considers that the Greek system of statutory limitation referred to above is reasonable; the limitation period of twenty years is a long one and it is not difficult or impossible for the persons concerned to stop it running.

In ruling on the applicant's case the Greek courts followed and applied the relevant legislation and case-law in force: firstly, Article 3 of the legislative decree, which stated that the limitation period in respect of an account holder's claims stopped running only when the account holder claimed back his or her deposit or performed a transaction on the account; and secondly, Article 260 of the Civil Code, which stated that the limitation period stopped running when the debtor — in this case, the bank — recognised the claim. In that regard the Court of Cassation held that the act of recognition had to have been addressed to the creditor and to have reached him or her, and that the mere fact of entering the debt in the bank's records did not amount to recognition of the claim for the purposes of Article 260 and was therefore not capable of stopping the running of the limitation period (see paragraphs 18 and 21 above).

However, the Court considers that such a drastic measure as the time-barring of claims in respect of a bank account, on the ground that there have been no transactions on the account for a certain time, coupled with the case-law according to which the entering of interest in the records does not constitute an account transaction, is apt to place account holders, especially when they are ordinary citizens unversed in civil or banking law, at a disadvantage vis-à-vis the bank or even the State in cases where Article 3 of the legislative decree is applicable.

The Court notes that under Article 830 of the Civil Code, if a person who deposits a sum of money in a bank transfers to the latter the right to use the sum in question, the bank must keep it and, if it uses it for its own purposes, must return an equivalent sum to the depositor on termination of the agreement. Account holders are therefore entitled to believe, in good faith, that their deposits are safe, especially if they see that interest has been credited to their account. They can legitimately expect to be informed of any situation that might jeopardise the agreement they entered into with the bank or their financial interests, so that they can take the necessary steps in advance to comply with the law and protect their property rights. Such a relationship of trust is inherent in banking transactions and banking law.

The Court further reiterates that the principle of legal certainty is implicit in all the Articles of the Convention and constitutes one of the fundamental aspects of the rule of law (see Nejdet Şahin and Perihan Şahin v. Turkey, [GC], no. 13279/05, § 56, 20 October 2011). In the Court's view, the State has a positive obligation to protect citizens and to require that banks, in view of the potentially adverse consequences of limitation periods, should inform the holders of dormant accounts when the limitation period is due to expire and thus afford them the possibility to stop the limitation period running, for instance by performing a transaction on the account. Not requiring any information of this kind to be provided is liable to upset the fair balance that must be struck between the demands of the general interest of the community and the requirements of the protection of the individual's fundamental rights.

In the Court's view, the absence of such information placed an excessive and disproportionate burden on the applicant which cannot be justified either by the need to terminate legal relationships whose existence has become uncertain — as asserted by the Court of Appeal in the instant case — or in order to ensure the proper functioning of the banking system.

Accordingly, there has been a violation of the applicant's rights under Article 1 of Protocol No. 1.

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